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B. C. et al v. Blue Cross of California et al.

January 3, 2012

B. C. ET AL
v.
BLUE CROSS OF CALIFORNIA ET AL.



LINK: 8

CIVIL MINUTES - GENERAL

Present: The Honorable GARY ALLEN FEESS

Renee Fisher None N/A Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants: None None

Proceedings: (In Chambers)

ORDER RE: MOTION TO REMAND

I. INTRODUCTION AND BACKGROUND

Plaintiff Brooklyn Chase ("B.C."), through and with her guardian ad litem, Marriane Chase, initiated this putative class action in Los Angeles Superior Court on July 15, 2011, alleging that Blue Cross of California ("Blue Cross") wrongfully denied coverage to her and thousands of other children with autism spectrum disorder ("ASD"). (Docket No. 2, Declaration of Mary R. Conklin ("Conklin Decl."), Ex. 1 at 130 [Compl.], Ex. 1 at 69 [First Am. Compl.] ("FAC") ¶ 1.) Defendant removed the case to this Court on October 28, contending that B.C.'s simultaneous enrollment in an Employee Retirement Income Security Act ("ERISA") plan preempts her state law claims and gives rise to federal jurisdiction. (Docket No. 1, Not.) Plaintiffs now move for remand on the grounds that Defendant's removal was untimely, and that the ERISA plan is immaterial to the action. Because the Court concludes that Defendant's removal is premature, the motion is GRANTED, and the case is REMANDED to Los Angeles Superior Court.

Plaintiffs allege that California's Mental Health Parity Act ("MHPA"), as well as Blue Cross's own health insurance contracts require the insurer to provide coverage for the treatment of ASD. (Id. ¶¶ 1-2.) Nevertheless, Plaintiffs allege, Blue Cross has "a pattern and practice" of persistently refusing to provide state-mandated health care and treatment for ASD, systematically denying coverage for applied behavior analysis ("ABA") despite that therapy's recognized effectiveness in treating problems associated with ASD, and despite the "critical need" for it to be provided at an early age. (Id. ¶¶ 3, 23-24.) Brooklyn, who has been diagnosed with ASD, was "repeatedly and wrongfully denied treatment" for that condition until recently, when Blue Cross "authorized limited ABA for [her] but did so with the proviso that the ABA would have to be administered by someone who possesses a license to provide various types of other services but not necessarily credentialed for providing ABA." (Id. ¶¶ 13-18.) Plaintiffs allege that Blue Cross has "impos[ed] such an artificial requirement" because it knows "that those who are trained to provide ABA typically are not licensed," and therefore that such a condition will allow it to refuse coverage. (Id. ¶ 24.)

On the basis of these facts, Plaintiffs assert four causes of action in their FAC. First, Plaintiffs bring a putative class action claim for declaratory relief, seeking a declaration of rights under insurance contracts with Blue Cross and the MHPA, on behalf of "all California residents covered as subscribers under Blue Cross of California's non-ERISA health care plans who have been diagnosed, or whose covered dependents have been diagnosed, with an autism spectrum disorder at any time from July 15, 2007 to the date of the mailing of the class notice in this action." (Id. ¶¶ 27, 34-40). Plaintiffs also bring individual causes of action for breach of contract, breach of the duty of good faith and fair dealing, and unfair business practices under California's Business & Professions Code §§ 17200 et seq. (Id. ¶¶ 41-66.)

II. DISCUSSION

LEGAL STANDARD FOR REMOVAL UNDER 28U.S.C.§1441

Defendants may remove any action filed in state court over which federal district courts have original jurisdiction. See 28 U.S.C. § 1441(a). Generally speaking, a party may bring a case within the jurisdiction of the federal courts by demonstrating the existence of either: (1) diversity of citizenship, under 28 U.S.C. § 1332; or (2) a federal question, under 28 U.S.C. § 1331. William W. Schwarzer, et al., California Practice Guide: Federal Civil Procedure Before Trial § 2:2, at 2A-1 (2006).

Pursuant to statute, federal courts have subject matter jurisdiction of "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. State-court lawsuits may only be removed to federal court if they could have been filed in federal court in the first instance. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). "The presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Id. In other words, a federal court is only to look to the plaintiff's pleadings in order to determine whether the case is ...


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